@techreport{Dur2012Social,
abstract = {This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that good social relationships undermine the credibility of a threat of dismissal but strengthen the credibility of a bonus. Among others, these two mechanisms imply that better social relationships sometimes lead to higher bonuses, while worse social relationships may increase productivity and players' utility in equilibrium.},
address = {M\"{u}nchen},
author = {Robert Dur and Jan Tichem},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {D23; J33; M52; M55; 330; altruism; spite; social relations; incentives; relational contracts; efficiency wages; subjective performance evaluation; Nash bargaining; Arbeitsbeziehungen; Soziale Beziehungen; Leistungsanreiz; Unvollst\"{a}ndiger Vertrag; Prinzipal-Agent-Theorie; Dynamisches Spiel; Verhandlungstheorie; Theorie},
language = {eng},
number = {3826},
publisher = {CESifo},
title = {Social relations and relational incentives},
type = {CESifo working paper: Behavioural Economics},
url = {http://hdl.handle.net/10419/58345},
year = {2012}
}
